Many new home buyers have never lived in a community with an homeowner’s association. Home Owner Associations or HOAs are a regulatory board found in planned communities, gated communities, condominium complexes and subdivisions. A Homeowners association collects fees or “assessments” from individual home owners to cover certain expenses. For example maintenance of common areas, insurance and health or safety improvements.  A HOA also enforces rules and regulations set forth by the developer or property owner.

The Community Association Institute estimates that nearly one out of every six Americans lives in a community association.  Before purchasing a Chapel Hill home that is regulated by an HOA, it is very important to read their bylaws.  These are laws governed by the association. Always ask questions so that you can make an informed decision. Here are a few to help you get started:

  • Ask the HOA about parking limitations/restrictions, pet limitations/restrictions with respect to quantity, size and type, restrictions related to outdoor decor/furniture/grilling restrictions (for balcony/patio), and if there are any current outstanding assessments the new owner will be responsible for assuming.
  • Be certain to ask if there is any active litigation, as this may affect buyer financing, and also indicates possible red flags with property in general you will want your home inspector to do extra due diligence on.
  • If you don't agree with something in the bylaws/restrictions, do you have any recourse?
  • What do monthly HOA assessments/fees cover? HOA fees typically cover common ground concerns such as landscaping, pest control, pool and fitness center maintenance, guard gate/security services and common area taxes. They sometimes cover utilities such as trash, water or cable television.
  • How often do HOA assessments/fees increase (and at what percentage), so you can be prepared for rising costs down the road?  Also ask, will the members be able to vote on the rising cost?

There are a lot of positives and negatives in becoming a part of a homeowners association.  It may or may not fit into your lifestyle and ideas.  Read the agreement well before you consider a home with a homeowners association.  Ask the homeowners in the community about the services they receive because of the agreement.  The better you understand how all the locals feel about their association, the easier it will be for you to know if it is right for you.  Also you want to know how the association deals with issues that arise. You want to know what you are getting yourself into before you fall in love with the new North Carolina house!